Let’s look at the facts;
Britain’s railway system is one of the most expensive in the European Union.
Britain’s railways cost 11 billion a year to run, 5 billion of which is paid for by the taxpayer.
Britain’s privatized railways system now costs the UK taxpayer more than when it was state-owned.
There has been a five-fold rise in government subsidy since privatisation of the railways.
Britain’s rail system is the most inefficient in Europe.
According to the Office of Rail Regulation (ORR), Britain’s rail system is up to 40% less efficient than European rivals including Germany, Ireland and Belgium.
Britain’s railways are less safe than their European counterparts.
According to the International Union of Railways, Britain has 0.36 deaths per billion kilometres compared with Italy’s 0.10, France’s 0.27 and Germany’s 0.31.
Britain’s rail ticket prices are the highest in the European Union.
According to the commuter watchdog, Passenger Focus, Britain’s rail passengers are paying 50% more than rail users on the continent.
And now the coalition government has announced plans to allow rail fares to go up by as much as 8% in England- with some rail companies setting even higher rates.
Now look at this fact;
A survey in 2009 found that as many as 70% of the British public would support re-nationalisation of the railways. A mere 23% supported privatisation.
So what should Labour’s policy on railways be?
This isn’t rocket science. The answer is clear.
Labour should pledge to bring back British Rail and completely re-nationalize the railways.
I’m tempted to finish my argument here. But let’s take a moment to look at the whole disgraceful history of the privatisation of Britain’s railways.
This is from an article in The Economist in 1999 –
The Rail Billionaires
One of the three rolling-stock firms, Porterbrook Leasing, was duly sold to senior BR managers for £528m. But only eight months later, Porterbrook was sold on by the management-buyout team for £826m. Having done little but (briefly) own the company, the directors and staff of Porterbrook, who had invested a mere £300,000 of their own, made nearly £83.7m. Porterbrook’s managing director, who had invested £120,000, scooped £34m. Venture-capital firms, which had put £2.2m into Porterbrook, picked up £315m. Eversholt Leasing and the third rolling-stock company were sold in 1997 for £900m more than the original purchasers paid. As Sir Alastair (Morton) told MPs on June 23rd, it was a ‘fat-cat carve-up’.
The directors of the main private train operators have made spectacular profits since privatisation. But despite this, they let the service deteriorate and invested too little in the rail network. This finally resulted in accidents such as the 2002 Potters Bar disaster which claimed seven lives and injured 76. The 3 million pound fine for the disaster imposed on the private firm Railtrack PLC and the private contractor Jarvis PLC was finally paid by the taxpayer as both firms had been wound up, meaning the directors were no longer liable.
When Railtrack PLC was finally wound up in 2002, the company was renamed Network Rail, which is technically a private business. In many ways this is the worst of all worlds, a private company, backed by the taxpayer with not even any shareholders to answer to.
The executives in charge of Network Rail have taken advantage of this comfortable situation, and have been paying themselves bonuses and perks which have shocked even the present government.
When Network Rail decided to award its chief executive Iain Coucher a £1m payoff, the present Tory transport Secretary Philip Hammond said this;
This payoff will stick in the gullet of every farepayer and taxpayer who think they pay too much to use our railway …… most people will feel it doesn’t sit well given the difficult times most families are facing.
You’ve got to be doing something wrong if you’ve managed to receive a ticking off on executive pay from a Tory minister.
The truth is that rail privatisation has been a total disaster.
If British Rail had the same amount of government subsidy our railways have now, we would have one of the best rail systems in the world, with a single company owning the trains, the track, the system maintenance and the ticketing making it cheaper to operate resulting in efficient services and affordable fares
Labour should pledge to take all public transport, rail, trams and buses back into full public ownership.
Labour must oppose the Tory-led Government’s policy of shifting the cost of running the railways on to passengers.
Labour should also pledge to oppose the European Union Commission’s proposals to reduce rail subsidies.
Labour’s Shadow Transport Secretary, Maria Eagle recently said this about the plans;
Over the next three years, commuters will see fares rise by as much as a third and many will end up paying a fifth of their salary just to get to work, more than they spend on their mortgage or rent.
‘Now, this barmy EU plan risks pricing people off the railways altogether, adding to the congestion on Britain’s roads.
Labour should pledge to make public transport once again a service for the public, not just the few who can afford it.
Labour should pledge to stop the fat-cat carve up of our public transport system.
The country would be better off for it, passengers would be better off for it and taxpayers would be better off for it.
And who knows? A policy like this could even win them the next election.
“Labour should pledge to make public transport once again a service for the public, not just the few who can afford it.”
But will they though? Somehow I doubt it.
Great article which reveals in simple, straightforward terms what the basic problem is. We need a Labour Government committed to it’s original programme, as laid out in the old Clause $: To secure for the worker… the full fruits of his labour…”.
It’s not rocket science.
Chris, I agree. Think Left support Labour returning to policies in its original programme, Clause 4 rewritten, but also in context of today and the looming Oil Crunch which could hit much sooner than believed, in 2015. Think Left is working on a comprehensive manifesto. Watch this space.
Just noticed Clause 4 has turned into Clause $. It might be a typo but its a strangely apt one. Look forward to seeing the manifesto.
An excellent article Julian. Yes, I do believe it should be in Labour’s manifesto as part of greener transport policy.
Great article Julian – what are your thoughts about a new not-for-profit cooperative looking after the railways?
….labour promised this in the run up to the 97 election…. will they do as they say this time?
i was surprised to hear one of my brothers describe network raiil who he works for as a masonic organisation, hes been trying to climb the career ladder but they wont let him improve his situation. at the moment he gets up at 4am and goes to bed by 8pm every week and hes tired of it. tired workers are dangerous workers as ladbrook grove proved. seems network rail are no different than rail track, the same bastards running the system into the ground.
Great presentation of the reality that privatisation has given us a more expensive and worse service on the railways … so much for neoliberal dogma that private is better than public.
A cheap way of re-nationalising would be to simply let the franchises run out. Unfortunately the Tories plan to extend the duration of franchises, presumably to block this simple expedient.
However, the fact that the overall increase in fares is planned to be 30% over the next three years, means that the Labour party must urgently develop a green transport strategy that could be implemented quickly on their return to power. As Pam says, we are facing an oil crisis, probably within the next four years, which will create a profound degree of havoc to our transport systems. Affordable alternatives to petrol and diesel fueled options are an unavoidable imperative for both the individual and the economy.
Cooperatising the railways is also a good idea. The Cooperative Party already have a well-thought out plan for it – see here;
This is an excellent article, which makes a clear, logical case for re-integration and renationalisation of our railways, buses and trams as others have already commented. In addition to the important and perceptive quote from Maria Eagle in the article about the need to reject EU Commission dictats over reducing rail subsidies, there are a number of other reasons why a future Labour government must take responsibility for ensuring a future for a green, publicly-owned, public transport sector in Britain. We are on the edge of a precipice of losing forever our ability to have a train manufacturing industry in this country. The coalition government’s recent decision to award the £1.4bn ‘Thameslink’ trains contract to German company Siemens, which does not have the technology or the skills to build the new fleet of trains, but won the contract because it is bankrolled by the German government’s own ‘active industrial policy’ that provides cheap credit, is a result of the continuing shipwreck that is rail privatisation and will very likely lead to Britain’s last domestic train manufacturer (Bombardier) closing its UK plant. If this happens, it will not be possible to simply start up another train building plant in a few years’ time. The accumulated skills will have been lost and the start-up costs would be prohibitive. A train building sector must be supported by a nationalised, integrated railway system, or it will not survive the ‘feast and famine’ of the private sector.
This is also the reason why the Co-op Party’s plans for ‘mutualisation’ or ‘cooperatisation’ of the railway sector are pure eyewash and should be firmly rejected by those writing Labour’s future transport policies. Cooperatives may be fine if you are functioning at the level of a pure consumer, or retail business. However for a green, public transport sector to thrive in this country we need to think beyond a ‘customer/service industry’ paradigm. Railways require long-term planning and massive capital investment that can only come from the state. At present the state simply wastes money by outsourcing delivery of public transport to profligate private companies, which put their shareholders’ and directors’ interests first, second and third. This has resulted in a calamitous collapse in confidence and quality of public transport in Britain and now threatens the viability of our last remaining train manufacturing plant. What is required is strong central planning of a state-owned, integrated rail industry, which is the only way in which this sector can be rescued from privateers and the vandals of the EU. Alongside this Labour should implement increased statutory powers for local authorities to mandate delivery of public transport services and the development of new democratic structures at national, regional and local level to involve workers through their trade unions and public transport users in making public transport planning and delivery accountable to the people that it serves. This would signal a desire not to return to the top-down ‘Morrisonian’ model of nationalisation that unfortunately characterised British Rail.
Some excellent points Alex, especially about manufacturing. Why are we Brits so reluctant to have an ‘active industrial policy’ like the Germans do?
I suspect that the answer to your question is that successive UK governments’ reluctance to adopt an ‘active industrial policy’ is due to the overwhelming dominance of the interests of finance capital in British society and in policy-making since the late 1980s. The ‘big bang’ in the City of London, the growth in ‘invisible earnings’, the major attacks on manufacturing during the Thatcher era and particularly the development of new financial vehicles (hedge funds, Credit Default Swaps, etc) have emphasised banking, insurance and other financial interests above all others. Interest rates have to be low to suit the needs of the finance sector, which precludes saving and long-term investment, which is what an active industrial policy requires.
Additional factors obviating against aip include cultural and political factors, such as snobbery about ‘manufacturing’ and the nascent fear of trade union power in the political elite, plus the thought that investing in anything more permanent than service industry jobs is ‘old fashioned’. Perhaps we need some new Victorians.
Alex – the idea of turning the whole Tory Victorian Values idea on its head and using it instead as a policy which means having an active industrial policy, investing in manufacturing and encouraging industrial innovation is an inspired idea.
Do you fancy writing an article for Think Left on it?
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I work for a large train operating company, and some time ago I was talking to a manager of another company who was of the opinion that had Labour won the last election, they had plans to reduce the number of franchises down to four with a view to reducing that to one in any following Labour government. Not saying it would have happened, of course, but I’m sure he didn’t just make it up.
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Too long have private brigands, posing as corporations been profiting from our essential services, that belong to US the people. We need to make a stand to have them returned to all of us.
At the same time the new pro-right government, which came to power a month ago is serious about denationalising the Indian Railways piecemeal.
They are trying to take away all that Nehruvian area gave to its people by nationalising Banks and building other basic infrastructure over the years. Seems they don’t learn anything fro history.
Unfortunately, that is no surprise. It is the neoliberal blueprint and we can expect that the new Indian govt will implement much more of the rest. For example, I imagine that the disastrous EU-India FTA will now be signed, with all its implications for generic medicines in sub-Saharan Africa, farmers and the export of Indian workers into the UK, unprotected by employment legislation and undermining collective bargaining for UK unions.